In the earlier days, fundamental analysis was the only Investment method' that was a given any credibility. But in the modern days, it is changed so much as the arrival of the high-speed computing system. The technical analysis is much easier to understand rather than the fundamental analysis. Nowadays many lodge investment companies and portfolio managers use the technical analysis than the fundamental analysis. People are using technical analysis than the fundamental analysis because it is much easier to calculate and it is very easy to determine nearest the entry and exit point. But it is very difficult in fundamental analysis to calculate the exact entry and exit point.
The market has changed a lot today. For that, we also need to change our strategies according to the modern trend. Your investments are moving based on the technical factor rather than the fundamental factors.
To become a successful investor you need to follow both the fundamental analysis and technical analysis. I always suggest you select the stocks and the sectors which are fundamentally very strong and then select technical analysis to decide whether to buy that stock or not.
Fundamental Analysis is a method, with this method you can evaluate the value of the underlying company. Basically, we do a fundamental analysis to understand the economic conditions and the industry along with the company’s financial condition and management performance. You can understand this by reading the balance sheet, the profit and loss statement, financial ratios and other data that could be used to forecast the future of a company. Generally, we use the real data to analyze a stock’s value. Fundamental analysis uses, book value, return on equity, earnings, revenues, future growth, profit margins and other data to define a company's underlying value and prospects for future growth. The thinking behind the fundamental analysis is that as the company grows so will the value of the shares increase.
Technical analysis started out with pretty simple concepts. Earlier, it was about looking for directional trends in prices and divergences between related market indexes. At the time the stock prices start moving in one direction either upper or lower, and then they are more likely to follow that trend than to reverse. Technical analysis was just a way to visualize this perception.
Fundamental analysis and technical analysis they have different goals. Fundamental Analysis mainly focuses on long-term investment what is the technical analysis mainly focuses on short-term and mid-term investment.
It completely depends on you, whether you are a short term, long term or medium term investor. If you are a medium term or short term trader then the possibility is that you are looking for technical analysis and rather than the fundamental analysis. Because if you follow the technical analysis then you will be able to act quicker after watching the chart pattern. Because if you are trading for the short term of little then you should not always look for the entry and exit point only. You should also look for the stop-loss point.
Long-term investors always look for the fundamental analysis more than the technical analysis. Long-term investors also look for the technical analysis to know the stock Trend whether it is in uptrend or downtrend. As a long-term investor, there is little more time available for considering all other factors
• Earnings Per Share
• Price to Earnings Ratio (PE Ratio)
• Price to Sales Ratio (PS Ratio)
• Dividend Payout Ratio:
• Book Value:
• Return on Equity:
• Volume:
• Simple Moving Average (SMA)
• Weighted and Exponential Moving Averages
• Resistance & Support
Support is the point level from where from the stock price cannot fall beyond that level whereas Resistance means from where the stock prices cannot move up further. Support level is the buying opportunity for the traders whereas the resistance level is selling opportunity for the traders.
2.Fundamental analysis is mostly used by the long-term investors but the technical analysis is used by both long-term and short-term investors.
3.Fundamental analysis is not involved in market prediction but for technical analysis market prediction Is sole purpose
4.Fundamental analysis stock bought when the Market value of the stock is less than the intrinsic value of the shares but in technical analysis stock bought when the technical indicators show the buying signal.
It is absolutely your decision to choose between the fundamental analysis and technical analysis. But in my opinion smart investors always look for both combinations. The first analysis the fundamental strength of the stock then if the fundamental strength is good then they move to technical analysis and take the final call whether to buy stock or not to buy stock or not.
The market has changed a lot today. For that, we also need to change our strategies according to the modern trend. Your investments are moving based on the technical factor rather than the fundamental factors.
To become a successful investor you need to follow both the fundamental analysis and technical analysis. I always suggest you select the stocks and the sectors which are fundamentally very strong and then select technical analysis to decide whether to buy that stock or not.
What is the fundamental analysis?
Fundamental Analysis is a method, with this method you can evaluate the value of the underlying company. Basically, we do a fundamental analysis to understand the economic conditions and the industry along with the company’s financial condition and management performance. You can understand this by reading the balance sheet, the profit and loss statement, financial ratios and other data that could be used to forecast the future of a company. Generally, we use the real data to analyze a stock’s value. Fundamental analysis uses, book value, return on equity, earnings, revenues, future growth, profit margins and other data to define a company's underlying value and prospects for future growth. The thinking behind the fundamental analysis is that as the company grows so will the value of the shares increase.
What is technical analysis?
Technical analysis started out with pretty simple concepts. Earlier, it was about looking for directional trends in prices and divergences between related market indexes. At the time the stock prices start moving in one direction either upper or lower, and then they are more likely to follow that trend than to reverse. Technical analysis was just a way to visualize this perception.
Fundamental analysis and technical analysis they have different goals. Fundamental Analysis mainly focuses on long-term investment what is the technical analysis mainly focuses on short-term and mid-term investment.
Do you trade technical or fundamentals?
It completely depends on you, whether you are a short term, long term or medium term investor. If you are a medium term or short term trader then the possibility is that you are looking for technical analysis and rather than the fundamental analysis. Because if you follow the technical analysis then you will be able to act quicker after watching the chart pattern. Because if you are trading for the short term of little then you should not always look for the entry and exit point only. You should also look for the stop-loss point.
Long-term investors always look for the fundamental analysis more than the technical analysis. Long-term investors also look for the technical analysis to know the stock Trend whether it is in uptrend or downtrend. As a long-term investor, there is little more time available for considering all other factors
Fundamental Analysis Tools (discussed here at https://investmenttipstoday.blogspot.com/2018/04/fundamental-analysis-of-stocks.html)
• Earnings Per Share
• Price to Earnings Ratio (PE Ratio)
• Price to Sales Ratio (PS Ratio)
• Dividend Payout Ratio:
• Book Value:
• Return on Equity:
Technical Analysis factors (discussed here at https://investmenttipstoday.blogspot.com/2018/04/technical-analysis-of-stocks-commodities.html)
• Price Trends
• Volume:
• Simple Moving Average (SMA)
• Weighted and Exponential Moving Averages
• Resistance & Support
Support is the point level from where from the stock price cannot fall beyond that level whereas Resistance means from where the stock prices cannot move up further. Support level is the buying opportunity for the traders whereas the resistance level is selling opportunity for the traders.
Differences:
1.Fundamental analysis the current market price is one of the inputs but in technical analysis Prices and their movements are important
2.Fundamental analysis is mostly used by the long-term investors but the technical analysis is used by both long-term and short-term investors.
3.Fundamental analysis is not involved in market prediction but for technical analysis market prediction Is sole purpose
4.Fundamental analysis stock bought when the Market value of the stock is less than the intrinsic value of the shares but in technical analysis stock bought when the technical indicators show the buying signal.
It is absolutely your decision to choose between the fundamental analysis and technical analysis. But in my opinion smart investors always look for both combinations. The first analysis the fundamental strength of the stock then if the fundamental strength is good then they move to technical analysis and take the final call whether to buy stock or not to buy stock or not.
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